The Cognitive Mismatch Between Newspaper Execs And Newspaper Readers

from the going-somewhere? dept

Tue, Sep 15th 2009 10:44pm — Mike Masnick

I've been having an email debate concerning newspaper business models with the David Carr of the NY Times for PBS' MediaShift, which I believe will be published later this week, so I won't reveal too much now. However, the key points are that Carr believes paywalls/micropayments make sense and I don't. We've gone back and forth on it, and I think it's been quite an interesting discussion, but one key point that I keep trying to make is that Carr seems to think enough people will pay to make such things a viable model. I have trouble believing this, and some recent research (highlighted by Steve Outing) suggests that many newspaper execs have a stunningly large disconnect between how they think readers will react to paywalls, and how readers themselves actually say they'd react to paywalls:

If you can't see that image clearly (you can click on it to get a larger image), newspaper execs believe that if they took down their web content, 75% of readers would switch to the paper version of the newspaper. Meanwhile, readers who were asked the same question had only 30% saying they would go to paper sources. Above that? 68% said they'd go to other local sources first. 45% said television. 37% said other regional/national online publications. 35% said radio. I believe a key point of disagreement between Carr and I reflects this same sort of issue. Carr suggests that there aren't many outlets for people to go to if the newspapers walled up. I argued that there are an immense number of options -- and they're growing daily. The problem is if you think of the market as being "newspapers" or "sources that people go to for news." I believe that it's the latter. Many newspaper people seem to think it's the former.

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Filed Under: newspapers, paywalls

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Yohann, 15 Sep 2009 @ 11:33pm

Types of news also
I think the type of news that people really goes for depends upon the type of individual. Obviously financial people would want to hear about international and national news to see events that have to do with Wall Street and their investments. Sports fanatics would maybe only watch international and national news part of the time (not pertaining to sports), and watch sports most of the time, especially their favorite teams.

People who work very menial jobs may not care one darn bit about world news, but they may only care about traffic getting to work or perhaps local news to see what's happening in their area. Differentiating between those might prove a viable option.

Obviously, if someone can't afford to read the news, they'll watch it on television. But financial investors pay to get up-to-the-second Wall Street reports and to-the-minute business releases.

Personally, I wouldn't pay for online news at all. But much of my concern goes into technology and science news. If paywalls went up, I would go to other sites that had computer, technology and science information. I won't care one bit what's happening in politics because I just don't have an interest in that area.

Newspapers can put up paywalls, but as was mentioned, I'll just go somewhere else to get my news. Why the hell would I care one iota about sports and finance if I have to pay for it???
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Chargone (profile), 16 Sep 2009 @ 12:15am

that's not the only disconnect on that pair of graphs.

take a look at 'other local media sites' and 'other local internet sites'

then look at 'print edition of other paper' ... it's in the same Place, but the percentage difference is pretty big.
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CAS, 16 Sep 2009 @ 12:35am

It's the distribution model
I looked up the study that you're pointing out and it actually has some interesting data, the main one being that 40some% of newspaper execs don't expect paywalls to work. They're evaluating them anyway because they're desperate, which makes sense.

The unfortunate reality is that there's going to be considerable consolidation in the news industry because the internet has changed the distribution model. As the study points out, news sites are reaching 10 times more people on the web than in print. 10 times!

What that suggests to me, is that what was once a balance of supply and demand, is now an oversupply. I'm going to guess that the number of news papers that survive is about 1 in ... 10?

The paper that figures this out will try and build their core readership instead of charging them in order to push out their competitors. As Facebook is proving (and Google already proved), the internet is about scale. The papers that manage to integrate themselves with the typical daily habits of the masses will win big and the others will probably simply fail.
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Tele2002, 16 Sep 2009 @ 12:48am

What if they had more choice?
Hi Michael, this is not the only place we are seeing such mismatch of providors and consumer wants/needs, some print editions get it right, others get it seriously wrong.

I was recently in Germany and happened to pickup the international edition of the NY Times (wasn't called that on the front, but was referred to as the NY Times International edition throughout the paper)athen the following morning I had the international edition of the Independant... the difference was astounding with the amount of advertising in The Independant.

So what if you could control the content in the printed editions and also print on demand in a place of your choice?

I have written a series of blogs on the subject (links below) about an intelligent Kiosk with various options for content control and levels of cost based on targeted advertising (well you have to subscribe so they have demographic information of you!)

Anyway have a read and please feedback.

Part 1 : http://tinyurl.com/fonp1
Part 2 : http://tinyurl.com/fonp2
Part 3 : http://tinyurl.com/l7c52u
Part 4 : http://tinyurl.com/nmtxcd
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Richard (profile), 16 Sep 2009 @ 2:15am

What I might pay a subscription for
is a service that scanned the internet and alerted me of things that might interest me. It would HAVE to be personalised and it would have to give me access to the whole internet - not just the trivial subset of one or two organisations.
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Anonymous Coward, 16 Sep 2009 @ 2:38am

Re: What I might pay a subscription for
i believe you can get that FREE with google.
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Anonymous Coward, 16 Sep 2009 @ 2:41am

Re: Re: What I might pay a subscription for
the link http://www.google.com/alerts
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Bill, 16 Sep 2009 @ 2:59am

Online Edtions
The only reason I use my local paper's online version is when the physical paper is late. I get up, drink coffee, read the paper, then go to work.

If the paper's late I will use the online version (my wife watches TV news). but that's the only time.

I have noticed that I don't read the physical and online versions in the same way. I generally at least skim a story if it looks interesting.

With the online version I've taken to shrinking the pages so I can see the whole page. I only skim the headlines. The advantage of this is that it only takes a few minutes to read the whole paper, instead of nearly an hour.

I don't know if this loss of my attention (and consequent lack of exposure to the ads that actually pay the freight) is important or not.

I do know that if my paper goes online only I won't be a subscriber.
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Anonymous Coward, 16 Sep 2009 @ 4:04am

Whenever I get the local newsrag it's for three reasons: crossword, cryptoquote, and sudoku. And this is only if I'm having lunch alone.
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Griff (profile), 16 Sep 2009 @ 4:10am

Does it have to be viable ?
>> Carr seems to think enough people will pay to make such things a viable model
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Richard (profile), 16 Sep 2009 @ 4:18am

Re: Re: Re: What I might pay a subscription for
Yes - I was aware that that existed - I was meaning something that utilised a bit more "intelligence" than a Google search does. It would require some human input - although that could probably be crowdsourced.
For example consider the recent story about the UK broadcast flag.

I became aware of that initially via the EFF and later this site covered it (I submitted it - but I guess lots of other people had already done so). Now the story first broke on MP Tom Watson's site about a week earlier. A google search for "broadcast flag" couldn't have found that site until a comment used those words four days later.

Google search isn't clever enough to fill this need properly (yet?) so maybe there is a niche for a paid for personalised alerting service. In a way this is what newpapers used to provide. Which paper you bought depended on your interests, political attitudes and physical location. In the UK the "Guardian reader" was different from the "Daily Mail reader" - and in a way that was what people were paying for. After all if you just wanted news then that has been available for free via the radio/TV for just about the whole lifetime of everyone now alive.
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Griff (profile), 16 Sep 2009 @ 4:23am

Re: Does it have to be viable ?
Jeez I am having real trouble posting here this week !

My point (that was cut off my previous post, apparently) is that paywalls don't need to be financially viable YET (like YouTube and Twitter aren't). They just need to get traffic up.

If the paywall is a tiny cost and a very convenient experience and adds value (aggregates stuff I like with crowdsourced reviews) then I might sign up.

Then the price creeps up later. But by then, everyone's doing it and it becomes a simple free market.

But unlike all the FREE registration barriers that already exist and turn people off, it has got to be convenient, like
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ondigo, 16 Sep 2009 @ 5:33am

Whither the ad revenue?
If the number of people getting news from the web is 10 times that of newspapers, why aren't newspapers charging more for their web ads? And why aren't there more ads on their web versions? (Heretical question, I know.)

I live in the Washington DC area, and the Washington Post recently improved the mobile version of their content. I wrote the editor and Help Desk both to congratulate them on the improvement, and followed up with a comment that they should actually include one or two ads per screen. We're grownups; we can handle it. I told them I appreciate the writers they have and I want them to continue to be paid. So they should be taking advantage of this revenue stream, especially if the ads there have URLs in them as a convenience to the user and advertiser.

Much as I like the Post's content, I spend 10 minutes max scanning the print version in the morning as I munch my Pop Tart. All my other news consumption is done online. And my wife only reads the Sunday paper. I am seriously considering dropping my print subscription.
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tm, 16 Sep 2009 @ 6:09am

If you read the NYT for news you will NOT be informed.

Here is a recent example, Van Jones had to resign for being a Truther but the NYT never bothered to report anything until after he had resigned and then they lied and ommited the most damning facts.
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Call me Al, 16 Sep 2009 @ 6:50am

Re: Whither the ad revenue?
"If the number of people getting news from the web is 10 times that of newspapers, why aren't newspapers charging more for their web ads? And why aren't there more ads on their web versions? (Heretical question, I know.)"

The difficulty there is that many internet savvy users use tools like Ad-Block and so avoid a lot of the advertising on the web. The very existence of that tool gives advertisers a useful lever to force the cost of their adverts down because it is conceivable that many of the people who read the article the ad is placed on will never see the advert.

I want sites to be ad supported rather then paywalls but I don't want to be bombarded with ads. I will always have Ad-Block running because of the many websites which will bombard me. Its a bit of a dichotomy to be sure. Any suggestions?
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Craig, 16 Sep 2009 @ 6:58am

75% -- Wrong
I have to point out that your characterization of the exec survey is completely wrong. It is saying that 75% of *execs* believe that users (undefined portion) would switch to print. The 30% of users that would switch may be lower or higher than what those 75% of execs expect.
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Robin, 16 Sep 2009 @ 7:00am

Re: Whither the ad revenue?
"If the number of people getting news from the web is 10 times that of newspapers, why aren't newspapers charging more for their web ads? And why aren't there more ads on their web versions?"
if i'm not mistaken, the answer goes to the technique and execution of marginal pricing. it costs a ton to distribute that last advertisement on their printed newspaper, it costs close to zero to distribute that last ad on their website. in a competitive marketplace, the "newspaper" has to price the ad space they're selling at or near this marginal cost.

i can't wait to see the entirety of mike's conversation with david carr, and i'm curious if the notion of personalized aggregating sites (think netvibes etc) wherein the consumer (i prefer the term individual) can create their own "The Daily Me Gazette", a notion obliquely mentioned above by commentator yohann.
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John Fenderson (profile), 16 Sep 2009 @ 7:14am

Re: Online Edtions
The only reason I purchase the local paper's physical format is when I need a lot of newsprint for some reason (washing windows, doing something messy on my kitchen table, etc.) I don't use it for local news, even -- I haven't for over ten years.

My local news I get from the free weekly, not the newspaper (online or not), and national/global news I get from various online sources.

But I live in a relatively small town, so there really isn't all that much that happens on a daily basis. And our local paper, like our major state newspaper and most national ones, do a truly terrible, terrible job at reporting the news.
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John Fenderson (profile), 16 Sep 2009 @ 7:37am

I am astounded that newspaper editor believe people would switch to the print editions. They really do thing they produce something of value that can't be had anywhere else, don't they? That's the essential misperception, in my opinion.

Most people i know that don't read papers stopped reading them not because of the internet but because of the terrible quality of their product -- terrible as in not even worth free. They go to the internet because they had a vacuum that the internet filled. If these newspapers dropped of the net tomorrow, it wouldn't change that equation one bit.
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sehlat (profile), 16 Sep 2009 @ 8:51am

It's not just newspaper executives
This huge disconnect has happened to every obsolete or obsolescent industry, since executives seem to end up with huge blind spots as to what their business really is.

Railroad executives saw themselves as the be-all and end-all of transportation, and never noticed that highways and airlines would end up eating their lunch.

The telephone companies are wrestling with and trying to suppress VOIP, and demanding that everybody pay for using "their" pipes.

Book executives try to charge hardcover prices for electronic editions because they fear that cheap eBooks will destroy hardcover sales, never bothering to notice that paper and eBooks are NOT THE SAME MARKET.

And so with newspapers.

I wonder if there's any way to sell the New York Times company short about five years in advance.
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bshock (profile), 16 Sep 2009 @ 8:58am

Re: Types of news also
Interesting examples.

This makes me think that people wouldn't so much pay for "news" as they would for specific data.

Indeed, people will pay for sports scores or financial information. I myself even have a subscription to the New York Times crossword puzzle. Perhaps what these things have in common is that we know exactly what we are getting before we pay for it.

"News," on the other hand, is a vague and unreliable concept. On some days, the news is exciting and interesting, but on most days it's dull or practically nonexistent. I don't particularly want to pay for the days where there isn't anything interesting. You could try offering teaser headlines of stories for sale, but I suspect most people just read the headlines anyway.

When we pay for data in newspapers, we're buying the scarce quantity of convenience for something that's clearly necessary or clearly desirable. Everything else is a pig in a poke.
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william (profile), 16 Sep 2009 @ 9:18am

haven't read any "
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william (profile), 16 Sep 2009 @ 9:25am

Re: haven't read any "
great, I accidently pushed enter and got posted...

I haven't paid for any "real" news paper for a long time now. Mostly I just read them, free, in coffee shops and perhaps only the first 2-3 pages for the important news.

However, I do scan through google news a few times a day to check what's up, and only read what's of interest to me. If I happen to hit a link that ask for a subscription (even if it's a free subscription), I simply quit, do a google search for another site that offers the info free. Although it may not be exactly the same, but it's enough for me. I have hit the NYT, WSJ paywall many, many times and I NEVER hesitated to leave them and find something else.

And you know what, if one day ALL news sites decided to use paywall or take down their online content(highly impossible), I'll just stop reading news or go back to browse those free papers. After all, we live in an age of too much information and news rank pretty low on my list of priorities as most news have very little revelance to my daily life.
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Tom, 16 Sep 2009 @ 9:30am

Re: What I might pay a subscription for
Before radio and TV, the newspaper was how you found out about almost all events. With TV (3 or 4 channels) and radio, newspapers could still provide more analysis than what could be broadcast. With the internet, we get more analysis and spinning than we can handle. I don't need Google alerts; I can already find stories that support my biases without Google knowing still more about me.

What I would pay for is a service that goes a step further and clearly separates the facts from the lies with linked references, and in addition, picks apart the analysts and the politicians and the blowhards This would a larger version of factcheck.org, politifact.com, scopes.com, etc. I don't really need to read more "news" with a spin, but I would pay for a service that truly makes me more knowledgable.
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vastrightwing, 16 Sep 2009 @ 12:02pm

infinite goods
News is infinite goods in the same way air is infinite goods and people won't pay for it. Air distribution is free and news distribution is virtually free. A case can be made that people will pay for bottled/compressed air when they need pure air. People will pay for certain kinds of news if it has value beyond what is commonly available for free.

I won't register even for a free registration wall: not worth my time. I'd rather find a source of news that I don't have to login to. If I can't find it, I move on to something else. So forget people paying for news... it will never happen on a mass scale. Forget it! It will not work...

unless the government makes news distribution cost money (ie, they allow ISPs to cap bandwidth and charge more for it) or they require only certain people to distribute news, the news will continue to be limitless and distribution costs will continue towards free.
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Mr Big Content, 16 Sep 2009 @ 6:16pm

Apples And Oranges
So, you're comparing the opinions of highly-skilled, highly-paid professionals with those of random losers pulled off the street? And you think that those nobodies somehow know stuff that the important folk haven't thought of, that their unpaid opinions actually matter as much, that their thought processes are even on the same level? Typical loser Liberal thinking--give me a break! Why do you think those execs get paid the big bucks?
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jim s (profile), 17 Sep 2009 @ 2:26am

paywalls
I have thought a lot recently on what will keep the local newspaper alive. The thing that the paper has is that it is around for you to read when you are not online.

The average user now is not only online for reading a conventional web page, but on pda's now as well.

I have not seen that there has been any discussion about the contribution that could be made with such models as a twitter like portal, or connection with editing, and feeding news based on location to users, but there is an increase for mobile users to get this information, and on the other hand not be milked for the costs.

With Google sniffing around there in the mobile search and information area there is also the need for those with the reporting, and editing capabilities of newspapers to adapt to that possible market.

The paper editions will need to be adapted to longer term type information, and advertising that fits that model better than online.

Online web news should be used to draw the users to advertising that should have value to the local advertisers. I would read useful ads on the web pages, but most newspapers have gone to cluttered messes of pages, and I try my best at the current time to avoid the ad's. they are usually not of interest where they are placed.

Finding ads for local establishments, and national store chains that are on point to what I want would be better served by a local newspaper than having to jump from website to web site, or go to a search engine. Knowing what stores are there, and what they want to sell is better served by what the newspapers have, but they seem to concentrate on the type of web pages that are like late nite ads for diet pills than giving any thought to where the ads are, or how useful they are.

Also newspapers have the luxury of having the words and ink being composed and edited by individuals who don't have to look good from the belt up to talk on TV, and can actually think. I hope that is not lost, as most TV seems to be going to just pretty faces, and no sign of anything that they are reporting, vs. reading the AP feed, or the local newspaper on the air.

as to what would I pay for, archive access at a reasonable price (not $20 to look up an article) would be one thing that the newspapers could offer. Digitizing it so it is search-able would cost money, and be useful to those who are interested in history, and would be very interesting to me.
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MattP, 17 Sep 2009 @ 12:39pm

Re: It's the distribution model
So Econ 101 would tell you that either supply or price would have to go down to accommodate.

Since the supply is still increasing that should give you an idea where price will end up.
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Cody Jackson (profile), 18 Sep 2009 @ 6:46pm

Re: Re: Types of news also
ESPN makes a killing on sports related topics, both on TV, Internet, and even print. It has a niche market and can capitalize on it.

I believe that is the "secret" to making money for newspapers. Find a niche and fill it well. General news is not money making, especially with the many outlets to getting "standard" news. Most news outlets simply carry AP feeds, which can be found nearly anywhere, especially online.

Personally, I haven't picked up a newspaper for years. There's simply no reason too, except for convenience when I'm not near a computer or WiFi point. Normally, for general news info, I just turn on my Wii and look at the News Channel.

However, I have no interest in sports and most business news. In many papers, that's 1/3 to 1/2 of the paper. Local sections sometimes have useful info, but frequently it seems to be filler.

I am interested in technology and science, which is very under-covered with traditional media. Hence, most of my news interests have to filled online.

Ergo, as the parent stated, specific data are more of a marketable idea than general news. Heck, I can go to the BBC and get better news coverage than I can w/ most American media, so newspapers have already lost the battle for general news. They simply don't offer anything that can't be found elsewhere; charging for it will only make it worse.
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tele2002, 30 Sep 2009 @ 4:52am

So would it work?
So Cody, given your comments here would the idea I wrote about above work? Only looking for your opinion....

Here's the links again.

Part 1 : http://tinyurl.com/fonp1
Part 2 : http://tinyurl.com/fonp2
Part 3 : http://tinyurl.com/l7c52u
Part 4 : http://tinyurl.com/nmtxcd
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Cody Jackson (profile), 30 Sep 2009 @ 9:50pm

Re: So would it work?
In general, it would be a good idea. There are many times when I am not near a WiFi spot or otherwise would prefer to have a non-electric reading device. Having current articles to read would be nice.

However, I also like to read the comments on web sites. If an on-demand paper could incorporate these, allowing a reader to read the comments then when at a computer later to post a follow up comment, that would be another useful addition.
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Tele2002, 1 Oct 2009 @ 9:18am

Re: Re: So would it work?
So given that, if you also incorporated a print to web technology either as a clickable image or purl or 3d barcode and in the interface also had an option to include say Buzzed (like Yahoo's or maybe Digg) comments with XX thumbs up as part of the printed copy would that add an even more social dimension to the print, I mean it almost becomes alive then as new people print their's off new comments would be available, and users could subscribe to the favourite commentors etc etc
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Michael J, 2 Oct 2009 @ 3:13am

Re:Re;Re; So would it work
It's important I think to clarify the value of news to a mass market.

For most people most of the time, my impression is that the "news" is engaged mostly as one engages a weather report. Question one is "Is it going to rain." This translates to "did anything terrible happen that is going to affect me." Or it might be "who won yesterday's game.' The game in question might be sports, politics, or finance.

After that question is answered, one looks for other interesting things to discover. The fact is that while the internet is optimized for search, print is optimized for discover.

One can scan a print document using the visual part of the right brain in the background. Using words to search is a left brain activity that requires focus.

The business problem of newspapers in the last few years is merely the problem that is moving through the global economy. Over leveraged business enterprise who couldn't pay back their debts when the cycle changed. And couldn't make their payrolls when the funny money disappeared.

Now new forms of highly differentiated enterprises are reorganizing to grow for the next period of growth. It's clear that it's impossible to get any significant revenues from web advertising. While the reach of a website is massive compared to paper, the price of eyeballs keeps going down and down. Print advertising is a well proven model. Now that digital technology allows the same real estate to be sold again and again for different versioned editions an even better monetization model is possible.

Some newspapers in the States have taken a contrary approach. They charge for access to the website, not for the revenue stream, but to increase the perceived value of the print product.Given the recent announcements that Rupert plans to charge for web content and the fact that he's built the largest newspaper printing plant in the world, I would not be surprised if that were his strategy.

I think tele2002 is pointing to the real business problem when he describes the difference between the Independent and The New York Times International edition. The Independent is chock full of paying ads. the Times Internation, no so much.

The business problem is a legacy system that was too expensive to sell ads to local business would would love to buy them if the price were affordable.

In this context, I think tele2002 might really be on to something.

In this context, I think tele2002 is on to something.
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